ESSAY- Crime and no punishment: Why it's time to nationalize BP

The Supreme Court says that corporations have the same rights as individuals. When they misbehave, shouldn't they face consequences as serious as those imposed upon an individual?

It goes without saying that a person who commits a crime ought to face punishment proportional to the offense. Large and midsize corporations, which employ thousands of employees, have far vaster reach and power than even the wealthiest ordinary citizens. So their crimes can be breathtaking in scope. The 1984 industrial catastrophe at a pesticide plant in Bhopal, India killed 15,000 people. An additional 200,000 have since suffered serious injuries. Compared to the boards of directors of Union Carbide and Dow Chemical, which bought the company in 2001, Ted Bundy was small potatoes.

Unlike small-time serial killers, however, corporations get away with murder. For at least a year, management of the Toyota auto company knew that brakes in millions of its cars might fail. A 2009 ABC News investigation found that at least 16 people had died. "Safety analysts found an estimated 2,000 cases in which owners of Toyota cars including Camry, Prius and Lexus, reported that their cars surged without warning up to speeds of 100 miles per hour," reported the network. Yet Toyota did nothing. Instead they blamed their customers, saying they were resting their floormats on the gas pedals.

On May 18th, Toyota finally faced the wrath of the federal government. Its "punishment": a paltry $16.5 million fine, not one cent of which went to the victims or their families. The fine, which amounted to a ridiculous 5.5 percent of its 2009 profit, went into the U.S. Treasury's general fund–in other words, to kill Afghans and Iraqis.

Available to Congress and the President is a far more appropriate punishment: nationalization without compensation. Toyota's American operations ought to be seized and operated by the federal government. The top officials of the parent company in Japan, whose willful negligence murdered at least 16 American citizens, ought to be extradited and face trial in U.S. federal court.

Extreme? Expropriating private property is commonplace– when the target is Joe and Jane Sixpack. Just ask hundreds of homeowners of New London, Connecticut. When the city destroyed an entire neighborhood to build a luxury office development, the U.S. Supreme Court backed them up, radically expanding the concept of eminent domain. Unlike a lot of evil corporations, those homeowners didn't do anything wrong.

The U.S. government has not only the right but the duty to take over criminal corporations.

A 5.5 percent fine is a slap on the wrist. Nationalizing a company, on the other hand, protects the public interest. Hitting corporations in the balance sheet is a genuine deterrent to the managers of other companies contemplating lawless behavior. It brings in significant cash assets that can be used to compensate the victims of the company's criminal activities.

Nationalization can also serve the interest of public safety. The mine explosion that left at least 25 coal miners dead in West Virginia earlier this year left members of the public feeling helpless and frustrated at the slow and inept rescue attempt by Massey Energy, the site's owner and operator. Setting aside the obvious argument that natural resources ought to be exploited for the benefit of the American people rather than private businesspeople, the rescue operation would have benefited from the involvement of top experts at such government agencies as the Army Corps of Engineers.

In 2009 the Upper Big Branch mine received 450 safety violations. Massey Energy paid the U.S. Mine Safety and Health Administration less than $1 million total. That's less than one percent of its annual profits. That's roughly $2,000 per violation.

Back in 2007, if you got caught speeding in Virginia, you'd pay more than what Massey Energy pays for deliberately risking the lives of its employees.

British Petroleum is spending $6 million a day on its response to the explosion at its Deepwater Horizon oil drilling platform in the Gulf of Mexico. But that's a drop in the bucket next to the cost that will be borne by the people of Louisiana, Alabama, Mississippi and Florida. The disaster is spilling the equivalent of one Exxon Valdez wreck into the Gulf every four days–and it's been three weeks. Thousands of fishermen will be ruined. The tourism industry, already in trouble due to the economic collapse, will be devastated. The full extent of the ecological damage–dead animals and aquatic plants, huge dead zones devoid of oxygen–won't be understood for years.

BP failed to ensure that a "blowout preventer" at the Deepwater Horizon would work in the event of an emergency. But their real crime was drilling for oil 5,000 feet down in the first place.

Here again, it's easy to see how nationalization might help. Rather than wait for the clueless execs at BP to come up with a solution, a BP seized by the federal government (its American operations, anyway) would come under the jurisdiction of an organization that could assign experts from NOAA and the U.S. Navy, among other agencies, to stop the leak. After the leak is plugged, the publicly-owned former BP's profits would help defray the costs of the cleanup and extend benefits to fisherman and other victims.

Imagine the possibilities. What if Too Big to Fail had been turned into Too Big to Resist?

As a nationalized asset Citibank, which received $306 billion in bailouts, would be worth $152 trillion to taxpayers. Goldman Sachs got $15 billion; they're worth $70 trillion. Sell them off and no one would ever pay college tuition again. Or to see a doctor. Or we could give everyone a 50 percent tax cut. We're a rich country–the problem is that out-of-control corporations are hogging the wealth.

Businessmen charter corporations for the express purpose of avoiding individual legal liability. Isn't it high time we started holding criminal businessmen accountable?

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Ted Rall's most recent book is Wake Up, You're Liberal! How We Can Take America Back from the Right (Soft Skull Press).

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11 comments

Harry D June 3rd, 2010 | 11:31pm

Hey Ted Rall, how's that book title working out for you??

Nina M Gregory June 4th, 2010 | 3:34pm

Your article makes the most sense to me. Criminal acts deserve criminal punishment. And the ad campaign BP is now on is truly an insult to my intelligence! If BP and other major money interests want to spill oil all over the only planet we have to live on, they should pay to clean it up. I don't think that given today's system they ever will pay. All their money will go into the ad campaign to lull Americans into believing they are doing something. Fines? Simply a slap on the wrist to them and they will learn nothing.

Jake June 4th, 2010 | 4:22pm

There also needs to be criminal statutes for actions to violate for there to be a crime.

Whoops.

Argument fail.

ken jamme June 8th, 2010 | 4:34pm

Sadly, we all know why that would never happen

Brian K. June 8th, 2010 | 5:25pm

"The fine, which amounted to a ridiculous 5.5 percent of its 2009 profit, went into the U.S. Treasury's general fund--in other words, to kill Afghans and Iraqis."

Those planting carbombs in marketplaces in Bahgdad are not Americans.

Hope this helps.

King Ralph June 8th, 2010 | 6:24pm

Yeah lets put BP under the Corp of Engineers. That way the cover up can be government funded when three times the oil wells blow up. Why don't you ask New Orleans residents what they think of that brilliant idea from the empty head of a communist traitor.

Unbelievable June 8th, 2010 | 9:34pm

*rolls eyes*

Communist traitor... right. Those two words show your total ignorance about:

1. The United States government system.
2. The United States electoral system.
3. Basic government systems.
4. History.
5. The idea about accepting different ideas.

All in all, education has clearly failed you.

King Ralph June 9th, 2010 | 7:14pm

I'm sure your educated view of things explains why you listed government systems twice in 5 points. You can educate a pig as much as you want but at the end of the day it's still a dumb pig!

Unbelievable June 9th, 2010 | 7:23pm

Ah, you cannot distinguish the specific United States government system with general government systems. But what can I expect from people like you? A sign that the public education system is failing. Badly.

King Ralph June 10th, 2010 | 5:39am

Are you really this much of a crack addict or are you acting? The US Government system is a subset of government systems in general. That's as brain damaged as saying "You can't distinguish the Canadian government system from government systems." You're not distinguishing, it's a piece of the whole. Good thing Daddy's money went to educating the worthless instead of something that might have actually borne results (and yes that is spelled correctly since I know you can't tell the difference).

capitalistpig June 10th, 2010 | 7:52am

I suggest some of you go live in any country for 1 month that will nationalize companies on a whim. The only criteria is that you have to live the same lifestyle as an average citizen.